ON THE USE OF SANCTIONS WITHIN THE REGULATORY
FRAMEWORK:
4. Sanctions
are an important part of any regulatory system, providing both
an incentive to ensure compliance and a deterrent. For sanctions
to operate effectively, those regulated need to understand clearly
what their obligations are.
5. The regulatory
environment in which the Commission works is a complex one. The
political parties and other regulated bodies vary in size and
structure, from small single issue parties to the larger parties,
with seats in Parliament, and a more organised structure. At present,
the Commission's enforcement tools are a limited range of fines
and referrals to the police or prosecuting authorities for criminal
investigation. It has little scope for flexibility in its use
of sanctions because of the legislative framework. The fines
cannot be varied according to circumstances and do not cover the
full range of offences and contraventions under the legislation.
6. There
are pending changes to the legislative framework which will clarify
and expand the Commission's regulatory role in securing compliance
with the law. The Political Parties and Elections Bill currently
before Parliament would, if enacted, provide a wider range of
flexible sanctions and enable the Commission to take a more proportionate
approach.
7. We
found that the Commission wrote to all registered parties when
it decided to begin levying penalties for late submission of donation
and loan returns and annual accounts in 2007, but did not publicise
this change in other ways including on its website, as it has
with its policy on allegations and investigations. Best practice
in regulation states that policies should be shared with all interested
parties as an aid to compliance, but especially with those subject
to regulation.
8. The Commission
analyses the statutory returns it receives to identify trends
and assess changes in compliance levels, but does not report publicly
on them. As yet, the Commission does not have a robust set of
outcome focused performance measures that can be set against this
analysis in order to assess its performance in regulating party
finance.
ON COMPARISONS WITH OTHER REGULATORS:
9. Other UK
regulators and overseas Electoral Commissions have more flexible
sanctions available to them, are longer established and generally
regulate better established and tested rules. The Commission could
nevertheless do more in the following areas:
- preparation
and publication of a policy on sanctions to improve transparency;
- use of its
investigative powers to be more proactive in identifying reasons
for non-compliance with the statutory reporting requirements;
- better use
of communications to publicise the enforcement actions it takes
and its reasons for acting; and
- introduction
of performance measures to show its effectiveness as a regulator.
Recommendations
We recommend the
following:
- The Commission
does not yet have a fully risk based strategy for enforcement
and compliance as best regulatory practice suggests. The
Commission recognises the lack of such a strategy and is in the
process of developing one.
- The Commission
does not yet have a comprehensive and transparent enforcement
and sanctions policy. Work is well underway on indicative draft
policies and guidance to coincide with Parliament's consideration
of the Political Parties and Elections Bill.
The Commission should develop and promulgate their guidance,
based on a risk based strategy, through all available means (electronic
and other) as an aid to compliance.
- The Commission
does not have a performance measurement framework with performance
measures linked to outcomes as recommended in the Hampton report
as best practice for regulators. We
have provided separate guidance to the Commission on developing
performance measures and once the risk based strategy recommended
above is in place, it would be timely to develop performance measures.
- The Commission
is actively working towards compliance with the principles of
effective regulation. The
Commission needs to demonstrate its compliance with these principles
in order to make effective use of a more flexible sanctions regime.
2 The Funding of Political Parties in the United Kingdom
(Cm 4057, October 1998) Back
3
Available at http://www.opsi.gov.uk/acts/acts2000/20000041.htm Back
